Here’s some news I reckon some of you will have missed in a stressful week. New Zealand’s economy grew by 14% between July and September.
Yep, 14%. Feel free to select your superlative of choice: stellar, extraordinary, remarkable. No rush, I’ll wait. While you are doing that, let me give you some context.
The report card from across the ditch isn’t all brilliant. When assessed year-on-year, New Zealand’s economy shrank by 2.2%. Why? Because the pandemic isn’t over. The world remains mired in the biggest global economic crisis since the Great Depression.
We are still very much in this struggle, as the residents of Greater Sydney know all too well, given the current round-the-clock effort by the state’s well-regarded contact tracers to contain the cluster that threatens to steal Christmas.
But the stonking quarterly result from our near neighbour is worth taking note of, because if we roll back a few months in pandemic time we can exhume a Scott Morrison humblebrag.
Morrison was fond of observing not so long ago that Australia had successfully suppressed the coronavirus without the crippling economic costs borne by New Zealanders.
In case you’ve forgotten the policy differences between our two jurisdictions, New Zealand embarked on a hard lockdown to try to eliminate the virus – a 51-day shutdown from March to May.
Australia pursued a different approach: our public health strategy was/is suppression. Reflecting the strictness of the measures, New Zealand’s economy shrank by 12.2% in the June quarter. The Australian economy shrank by 7% – hence the Morrison humblebrag.
But New Zealand’s economic recovery in the third quarter has been stronger than Australia’s – a 14% rebound compared with 3.3% here.
The point of me raising this isn’t to fire off a glib feelpinion about Jacinda Ardern having a better strategy than Morrison’s based on one quarter’s economic data. That would be silly. New Zealand certainly isn’t out of the woods. The country faces significant challenges plotting a durable path to recovery given its heavy dependence on international tourism.
It would also understate our own exceptionalism. Both New Zealand and Australia have, justly, attracted plaudits around the world for managing a complex public health crisis better than countries we routinely benchmark ourselves against.
The reason I’m flagging the strength of New Zealand’s “comeback” (to borrow a word currently on high rotation in this country) is to highlight a basic fact. The simple point to make is there is no durable economic recovery from the coronavirus unless people are confident that the risks of Covid-19 are contained.
Bloomberg put the dynamic succinctly in its news report of the growth rebound this week: “New Zealanders have gone on a spending spree since the nation eliminated community transmission of Covid-19 in May and then successfully contained sporadic outbreaks.”
The best strategy for economic recovery is a successful public health strategy.
Now obviously things have picked up here. Consumer confidence is certainly returning in Australia, particularly since Melbourne emerged from the lockdown that weighed on Australia’s third-quarter performance.
Australia’s more modest return to growth in the September quarter was also driven by consumer spending. But I don’t detect we’ve yet hit the sweet spot for confidence. The tumult of the year has given us a reason to be cautious.
In uncertain times like these, there’s an important role for governments in building consumer and business confidence to seed economic recovery. But this life-coaching exercise being spearheaded by Morrison and the treasurer, Josh Frydenberg, is genuinely fraught.
The official talking point is Australia is staging a “comeback”. We’ve turned a corner. We’ve made it out of recession and into recovery. (If you are interested in the origins of the word, the advertising agency TBWA Melbourne suggested the “Our Comeback” tagline to the government).
Morrison and Frydenberg are actually quite careful about how they construct these messages. There’s lots of fine print and footnotes to Australia’s “comeback” – something you’d pick up if you follow events in detail.
But tracking back to the fundamentally fraught nature of this exercise, the risk of flogging the “comeback” too hard is people think the pandemic is over, and a sanctioned complacency creeps in.
The New South Wales health minister, Brad Hazzard, flagged that as a significant problem on Friday, pointing to an “avalanche of complacency” in the community.
Truth is, Hazzard and his colleagues have to answer some legitimate questions about their own complacency, given it looks like the enforcement of the rules around international flight crews has been too lax. But the state health minister’s broader point is legitimate.
If you are Morrison and Frydenberg, you want to build confidence but not complacency, and that can be a fine distinction to hit. If you sound too positive, you invite the nation to conclude the crisis has passed when it hasn’t, and that increases the risk of outbreaks, and so it goes.
Then there’s the vexed issue of lockdowns.
Since the second wave hit Victoria, we’ve had a largely stupid and at times genuinely brutish political debate in Australia about lockdowns and domestic border closures which has managed to decouple itself not only from nuance but from that simple fact – that the best economic strategy is a competent health strategy.
One of the stranger dynamics during this deeply strange year has been various players in the federal government castigating various premiers for internal border closures, when the big daddy of border closures was actually the decision of the Morrison government to close the international border – a decision with huge economic ramifications.
Given the new cluster in Sydney’s northern beaches, and the decision by some premiers to impose new travel restrictions in response, and given how this (alleged) conversation has gone all year, I really thought we would be limbering up for a fresh round of the numpty hour.
This seemed highly likely, given Gladys Berejiklian had made a point on Friday of sending a message to her fellow state and territory leaders that their response to unfortunate events in Sydney should be “proportionate”.
But interestingly, Morrison comprehensively declined every full toss he was given by Canberra reporters on Friday – refusing every invitation to castigate premiers for imposing reactive travel and quarantine restrictions.
Perhaps the prime minister resolved that his secret Santa gift to the premiers would be generosity rather than rancour – or perhaps he wanted the premiers to own what comes next rather than pretend he could control the play.
In any case, Morrison noted restrictions were a matter for state and territory leaders “and my preference is to work with the states and territories to support them to do their job, and their job is to protect the public safety. Their job is to protect public safety within their jurisdictions. It’s not my job to go around second-guessing other people’s decisions.”
As peace was being declared, as we entered the epoch of not second guessing the premiers, for a moment I thought I could hear the Victorian premier, Daniel Andrews, bellowing “ho, ho, ho” sardonically in his office in Melbourne.
Ho, ho, ho, Scott.
But this was whimsy, of course.